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Transfer on Death Designations: Is Your Property Protected From Loss?

The situation you’re about to read about sounds like a question that might end up on the Ohio bar exam—but don’t let that stop you from reading! The problem really is an interesting one, and more to the point, something that could end up affecting the property of you or someone you love. Even more importantly, we will tell you how to avoid a loss that you might not have ever seen coming.

If you have been reading this blog for awhile, you have heard about transfer on death accounts, which allow an account holder to place a designation on a bank or other financial account so that, when they die, the account automatically passes to the transfer on death (TOD) designee. But TOD designations aren’t only for bank accounts. You can transfer securities, vehicles and even real estate with a TOD designation, which is a beneficiary designation. A significant advantage of a TOD designation is that it allows the asset in question to pass immediately, an… Read More

Should I Have a Life Insurance Trust?

If you have family members who depend on you, you know you should have life insurance. But should you have a life insurance trust? Most people don't, but more people should.

What is a life insurance trust? An irrevocable life insurance trust (ILIT) is a trust that is established for the ownership and control of a life insurance policy, whether whole-life or term. In order for an ILIT to be effective, the settlor or grantor of the trust (usually the person whose life is insured by the policy held in trust) may not have any "incidents of ownership" in the policy.

As the name suggests, the trust cannot be revoked, meaning the insured person is no longer the owner of the policy. The ILIT manages anything to do with the policy during the insured's lifetime, and manages and distributes benefits paid out upon the insured's death. An ILIT may contain an individual policy, or a "second-to-die" policy which pays out when the second person in a couple dies.

You may be among the people who should consider an ILIT if any of the following apply to you:

You Want to Avoid Gift Taxes.

An ILIT can be drafted to avoid gift taxes if it is set up like a Read More

Should I Consider Burial Insurance?

You've seen the ads on TV: After the funeral of a neighbor or friend, two people are discussing how difficult things will be now for the surviving family because the cost of the deceased's funeral and burial was so high. The commercial ends with the actors vowing to buy burial insurance (often referred to as "final expense" insurance) to spare their family that kind of stress.

What exactly is burial insurance, and is it a worthwhile investment? Or is it an unnecessary expense that won't really make things any easier for your family after you're gone?

What Burial Insurance Is and Isn't

Many people confuse burial insurance with prepaid funeral policies, but they are, in fact, very different. Prepaid funeral policies are not insurance policies at all. They involve working with a funeral director to make and pay for your final arrangements in advance of your death. Doing this (and, of course, letting your loved ones know about it) can give you peace of mind that your funeral and burial arrangements will be as you wish, an… Read More

Does Life Insurance Have to Go Through Probate?

For many people, avoiding the probate process and having their assets pass outside of probate after their death is a priority. Ordinarily, having a life insurance policy does not interfere with that goal. In most cases, the proceeds of a life insurance policy pass directly to the named beneficiary without any probate involvement.

However, there are circumstances in which life insurance benefits must go through probate, which can delay payment to loved ones and even reduce the amount of funds available through the policy. Fortunately, there are relatively simple ways to avoid these situations, and ensure that funds are available for you loved ones when they need them.

If Your Life Insurance Beneficiary Has Died

What happens if you have someone named as the beneficiary of your life insurance policy, and your beneficiary dies? The answer depends on when the beneficiary dies. If they die before you, the policy benefits will go to any co-primary benef… Read More